BP Profit Tumbles 62%

Company says it need to bring costs to a level that is compatible with $50 per barrel

BP on April 28 reported a slide in first-quarter net profits to $2.387 billion, a drop of 62%, as the price of crude halved.

The data excludes changes in the value of oil held in stock, a key measure for the industry, and compared to net profit totaling $6.231 billion in the first quarter of 2008.

Production for the quarter rose 2.6% to 4.016 billion barrels of oil and gas, compared to a year earlier.

BP saw its profits plunge as the price of crude oil tumbled from more than $100 a barrel in the first quarter of 2008 to below $50 a year later as the global economic slump sharply reduced demand for energy.

BP said group sales slumped by 46% to $47.296 billion in the first quarter.

"Oil prices are expected to remain low and our customers are facing tough business conditions," BP chief executive Tony Hayward said. "We need rapidly to bring our costs to a level that is compatible with a $50 (a barrel) world," Hayward added. More than 5,000 jobs are being slashed in a bid to reduce costs.

Also in February, the company was forced to pay $179 million to settle a federal lawsuit over pollution at its Texas City plant, the site of a deadly explosion in 2005.

Copyright Agence France-Presse, 2009

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